Will prepaid cards grow more popular than debit cards?

• Position: MARKETING NEWS

MORE CONSUMERS THAN PREVIOUSLY THOUGHT ARE LIKELY TO ADOPT PREPAID RELOADABLE CARDS, according to new consumer research from Market Rates Insight, San Anselmo, Calif.

The newly released "Integrated Study on Service Fees" indicates that 47 percent of consumers are likely to use prepaid reloadable cards for routine purchases, making prepaid reloadable cards "one of the emerging lifestyle financial services that consumers are seeking from financial institutions" according to the company.

The study results from more than 1,500 bank customers and credit union members nationwide, shows that the respondents would be willing to pay, on average, $4.21 per month for the use of prepaid cards. This is just one of the newly identified lifestyle financial services that offer a new potential revenue source, the company notes.

The study suggests that there is a misconception about the demographics of consumers likely to use prepaid. While in the past, it was mostly low-wage earners who used prepaid cards, the future may be different. The study shows that among consumers who are likely to use prepaid cards, 36.7 percent earn between $35,000 and $65,000 per year; 22.1 percent earn between $66,000 and $100,000 a year; and 14.8 percent earn over $100,000 per year. The study also found that 42.3 percent of consumers likely to use prepaid cards are baby boomers ranging in age between 47 and...